Longboard Pharma sold in $2.6bn deal

BY Richard Summerfield

Neuroscience specialist Lundbeck has agreed to buy Longboard Pharmaceuticals in a $2.6bn deal.

The transactions, which has been unanimously approved by the boards of both companies, is expected to close in the fourth quarter of 2024, subject to the tender of at least a majority of the total number of Longboard outstanding voting shares, receipt of required regulatory clearances, and other customary conditions.

The transaction values Longboard stock at $60 a share, representing $2.6bn in equity value and $2.5bn net of cash.

Longboard is a clinical-stage biopharmaceutical company focused on developing novel, transformative medicines for neurological diseases. The company is currently working on treatments for forms for epilepsy, including Dravet and Lennox-Gastaut syndromes. Its leading drug, bexicaserin, has shown promising anti-seizure effects in preclinical and clinical studies. Lundbeck estimates bexicaserin could bring in a peak of $1.5bn to $2bn in sales, assuming a launch in the fourth quarter of 2028.

“This transformative transaction will become a cornerstone in Lundbeck’s neuro-rare franchise, with a potential to drive growth into the next decade,” said Charl van Zyl, president and chief executive of Lundbeck. “Bexicaserin addresses a critical unmet need for patients suffering from rare and severe epilepsies, for which there are very few good treatment options available. With this acquisition, we continue to execute on our Focused Innovator strategy, transforming the lives of patients suffering from severe brain disorders.”

“Longboard was founded to transform the lives of people living with devastating neurological conditions,” said Kevin R. Lind, president and chief executive of Longboard. “I am incredibly proud of what our team has achieved; delivering groundbreaking data with a differentiated and inclusive clinical approach to address the needs of a wide range of DEEs and obtaining Breakthrough Therapy designation.

“Lundbeck’s remarkable capabilities will accelerate our vision to provide increased equity and access for underserved DEE patients with significant unmet medical needs,” he added.

According to Mr van Zyl, the acquisition is part of Longboard’s broader focused innovator strategy. The strategy has already seen the company passing over the US rights for depression drug Trintellix to its partner Takeda in the summer in order to “create financial flexibility and reallocate resources to other growth opportunities”.

News: Denmark’s Lundbeck bets on epilepsy drug with $2.6 bln Longboard deal

Truck parts maker Accuride files for Chapter 11

BY Fraser Tennant

A victim of the freight industry recession in the US, commercial-truck parts manufacturer Accuride, along with a number of its US entities, has filed for Chapter 11 bankruptcy in order to facilitate the restructuring of its North American business.

The company’s liabilities are estimated to be between $500m and $1bn, according to the filing.

Accuride is the latest company in the US transport sector to file for bankruptcy this year amid overcapacity in the freight industry that is hurting both truckers and parts suppliers.

The company’s proposed restructuring, the result of extended negotiations with its lenders, will facilitate economic improvements for operations and significantly reduce funded debt from its balance sheet.

Accuride’s Mexican, European and Asian subsidiaries are not included in the Chapter 11 filing.

To ensure that it continues conducting its business in the ordinary course without interruption, Accuride’s lenders have agreed to provide $30m in debtor-in-possession (DIP) financing, which is structured to provide sufficient liquidity to continue normal operations and meet post-petition obligations to employees, suppliers and customers as they come due.

The DIP financing is intended to provide peace of mind to Accuride’s customers and suppliers and allow the company to maintain or restore normal trade terms with suppliers.

“Accuride’s reorganisation efforts are designed to create a healthier capital structure that will allow the company to remain a leader in the global wheel market,” said Robin Kendrick, president and chief executive of Accuride. “We anticipate a quick emergence from Chapter 11, with a de-levered balance sheet and improved capital structure.”

A leading supplier of wheel-end systems to the global commercial vehicle industry, Accuride’s products include steel and aluminium commercial vehicle wheels and wheel-end components and assemblies, as well as steel wheels for the European automotive and global agricultural, construction and industrial equipment markets.

Accuride is hopeful that it will be able to emerge from bankruptcy on an expedited basis, anticipated to be 90-100 days from the Chapter 11 filing.

Mr Kendrick concluded: “I am confident this reorganisation will give Accuride the financial flexibility it needs to grow its business and support its employees, customers and suppliers.”

News: Wheel supplier Accuride files Chapter 11 papers for U.S. operations

TPG and GIC acquire Techem in €6.7bn deal

BY Fraser Tennant

In what is its largest transaction to date, US asset manager TPG is to acquire German metering firm Techem from Switzerland’s Partners Group in a transaction valued at approximately €6.7bn.

TPG, through its dedicated climate investing strategy TPG Rise Climate, is acting as lead investor, with Singapore’s sovereign wealth fund GIC taking a significant minority stake.

The purchase price for Techem will be paid in two instalments, one at the close of the transaction, which is expected in the first half of 2025, and the remainder in July 2027.

Founded in 1952, Techem has built one of the largest digital energy services platforms in the industry. The company is active in 18 countries and services more than 13 million dwellings, with over 62 million digital measuring devices on its platform.

Techem’s services also help to advance the long-term decarbonisation of the real estate sector, which still drives approximately 40 percent of global CO2 emissions.

“Techem’s technology, transparent consumption statistics, and streamlined solutions for tenants, managers and asset owners alike are essential solutions for lowering costs and improving the environmental impact of real estate assets across Europe,” said Ed Beckley, managing partner of TPG Rise Climate. “There is a tremendous opportunity to reduce energy consumption in built environments by enhancing efficiency and better-managing overall demand.”

As a result of strong development over the past years, Techem has exceeded the €1bn revenue mark – with new digital services and broader decarbonisation services presenting future growth opportunities.

Techem intends to build on this foundation with its new partners TPG and GIC and further expand its ‘One Digital Platform’, leveraging the power of digitalisation to unlock significant energy efficiency potential in the building sector, optimise operational processes, and increase the living comfort of residents.

“With TPG and GIC, we are gaining strong new partners with the digitaisation and platform expertise needed to help us make significant progress in implementing our corporate strategy,” said Matthias Hartmann, chief executive of Techem. Together, we want to further expand and advance our position as a leading platform for digitalising and decarbonising the building sector across Europe and beyond.”

The transaction is subject to customary conditions and regulatory approvals.

Mr Hartman concluded: “We are very grateful to Partners Group and its co-investors CDPQ and Ontario Teachers’ for the trustful exchange and collaboration on the development of the company over the past years and look forward to building on our success with TPG and GIC.”

News: TPG and GIC to lead €6.7bn acquisition of Techem with backing from Canadian pension funds

Chevron to sell oil sands and shale assets for $6.5bn

BY Richard Summerfield

Chevron Canada, a subsidiary of Chevron Corporation, has agreed to sell its assets in Athabasca Oil Sands and Duvernay Shale to Canadian Natural Resources in a $6.5bn deal.        

The all-cash deal is expected to close in Q4 2024, subject to regulatory approvals and other customary closing conditions, and is part of the company’s strategy to divest $10bn to $15bn of assets by 2028.

The deal will see Chrevon sell its 20 percent non-operated interest in the Athabasca Oil Sands Project, 70 percent operated interest in the Duvernay shale, and related interests, all located in Alberta, Canada, to Canadian Natural Resources. The assets contributed 84,000 barrels of oil equivalent per day (boe/d) of production, net of royalties, to Chevron in 2023. Canadian Natural Resources said that these acquisitions add targeted 2025 production of approximately 122,500 boe/d, and the addition of approximately 1448 million boe/d of total proved plus probable reserves.

“These assets are a great fit for Canadian Natural and will allow us to further implement our strong operating culture and drive significant value for shareholders,” said Scott Stauth, president of Canadian Natural. “We have made significant progress in driving efficiencies at AOSP over the last 7 years since the original acquisition in May 2017. We expect further efficiencies and improved performance going forward as a result of our relentless focus on continuous improvement.

“The light crude oil and liquids rich Duvernay assets fit well with our current operations in the area and will drive significant value from our area knowledge and significant experience in this type of resource play,” he continued. “Both acquisitions provide Canadian Natural with immediate free cash flow generation and further opportunities to drive long term shareholder value.”

“This is a great opportunity to add to our world class Oil Sands Mining and Upgrading asset at AOSP, as well as light crude oil and liquids rich assets in Alberta,” said Mark Stainthorpe, chief financial officer of Canadian Natural. “Both of these acquisition properties are targeted to provide significant free cash flow generation on a go forward basis. Having operated the AOSP mines and knowing the assets well, eliminates the risks associated with a brownfield or greenfield project. These transactions are immediately cash flow and earnings accretive to Canadian Natural shareholders.

“Given our strong balance sheet and significant free cash flow generation we are in an excellent position to take advantage of these opportunities that don’t come along very often,” he added.

News: Chevron to sell assets worth $6.5 billion to Canadian Natural Resources

ADNOC agrees $16.4bn Covestro deal

BY Richard Summerfield

Abu Dhabi’s state-owned oil firm, Abu Dhabi National Oil Company (ADNOC), has agreed to acquire German chemicals firm Covestro for $16.4bn. The deal comes as ADNOC begins to diversify amid the volatility of oil markets.

To acquire Covestro, ADNOC will offer €62 per share. This represents a 54 percent premium over Covestro’s stock price before initial speculation about a potential deal began in June 2023, and a 21 percent premium to the closing price on 23 June 2024, the last share price prior to Covestro announcing the beginning of the confirmatory due diligence and the start of concrete negotiations. The transaction will be financed through ADNOC’s available cash.

According to ADNOC, the transaction is key to the firm’s international growth strategy as it aims to become a top-five chemicals player globally. A former unit of Bayer, Covestro manufactures polymer materials for construction and engineering processes. Its products are used in sectors such as sports and telecommunications, as well as in the chemical industry.

The deal also saw ADNOC sign an investment agreement under which it pledged to provide additional funding by buying €1.17bn worth of new Covestro shares from a capital increase at an offer price of €62, which Covestro will use to foster the further implementation of its growth strategy.

“We are convinced that the agreement reached today with ADNOC International is in the best interest of Covestro, our employees, our shareholders, and all other stakeholders,” said Markus Steilemann, chief executive of Covestro. “With ADNOC International’s support, we will have an even stronger foundation for sustainable growth in highly attractive sectors and can make an even greater contribution to the green transformation. We regard ADNOC International as a financially strong and long-term oriented partner with whom we will further drive our successful ‘Sustainable Future’ strategy in all market conditions. Our complementary growth strategies, shared commitment to advanced technologies, innovation and sustainability are key cornerstones of our partnership.”

“As a global leader and industrial pioneer in chemicals, Covestro brings unmatched expertise in high-tech specialty chemicals and materials, using advanced technologies including AI,” said Sultan Ahmed Al Jaber, managing director and group chief executive of ADNOC. “This strategic partnership is a natural fit and aligns seamlessly with ADNOC’s ongoing smart growth and future proofing strategy and our vision to become a top 5 global chemicals company. It represents a pivotal step for both organizations and embodies our disciplined approach to investing in strategic assets that drive long-term value and unlock new growth opportunities, while reinforcing our commitment to diversifying ADNOC’s portfolio. Our aligned strategies uniquely position us to meet the growing global demand for energy and chemical products, while accelerating the transition to a circular economy.”

News: Abu Dhabi's ADNOC to buy German chemicals firm Covestro for $16 bln